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Secure Capital v Credit Suisse: Difference between revisions
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In {{casenote|Secure Capital|Credit Suisse}} [2017] EWCA Civ 1486: A [[bearer security]] held as a [[global note]] by a [[common depositary]] on behalf of [[Clearing system|clearing systems]] which has a [[Contracts (Rights of Third Parties) Act 1999]] provision excluding the right of the end [[noteholder]] (in the [[clearing system]]s) to sue the issuer is enforceable according to its terms. The [[governing law]] is the law in which the {{tag|contract}} is expressed to be governed and not that where the instrument happens to be situated (in this case in a clearing system in {{t|Luxembourg}}). | {{cn}}In {{casenote|Secure Capital|Credit Suisse}} [2017] EWCA Civ 1486: A [[bearer security]] held as a [[global note]] by a [[common depositary]] on behalf of [[Clearing system|clearing systems]] which has a [[Contracts (Rights of Third Parties) Act 1999]] provision excluding the right of the end [[noteholder]] (in the [[clearing system]]s) to sue the issuer is enforceable according to its terms. The [[governing law]] is the law in which the {{tag|contract}} is expressed to be governed and not that where the instrument happens to be situated (in this case in a clearing system in {{t|Luxembourg}}). | ||
Interesting observation re [[privity]] though: the direct custodian, who ''would'' be able to sue, would not suffer a loss because of its back-to-back custodial relationship with the client. Therefore, even if it did sue, it would not be able to prove any loss. | Interesting observation re [[privity]] though: the direct custodian, who ''would'' be able to sue, would not suffer a loss because of its back-to-back custodial relationship with the client. Therefore, even if it did sue, it would not be able to prove any loss. | ||
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So wait, ''what''? The court is basically acknowledging that it is impossible for ''anyone'' to recover in contract for a breach of a bearer security held in a clearance system, since the proximate holder is obliged only to pass on to the ultimate holder what it receives, so it is "perfectly hedged". | So wait, ''what''? The court is basically acknowledging that it is impossible for ''anyone'' to recover in contract for a breach of a bearer security held in a clearance system, since the proximate holder is obliged only to pass on to the ultimate holder what it receives, so it is "perfectly hedged". | ||
{{seealso}} | {{seealso}} | ||